10 Aug Connecticut Collection Agency Shut Down
On Wednesday, August 6, 2008, the State Banking Commissioner issued a cease and desist order effectively shutting down Cornerstone Credit Corp., a collection agency based in Waterbury, Connecticut. The agency had been operating without a license since September 2005 and had failed to turnover money it had collected from consumers to the creditors who had retained its services. Consumers were also harmed because payments to the collection agency were not being reflected on credit reports.
Under Connecticut Law, the state could fine the company as much as $400,000.00 and the company president, Rene Gagnon, could be held personally responsible for a $200,000.00 penalty. Collection agencies are regulated by Connecticut law and must be licensed to operate in the state. Under the regulations, procedures must be maintained to properly document each collection account and to turn over all money collected consumers promptly to the creditors. In this way, the consumer’s credit reports will appropriately reflect payment efforts being made.
Actions like this are rarely taken without serious violations by the collection agency. Connecticut’s Attorney General has taken consumer’s rights seriously and will appear in Superior Court on October 7, 2008 in a hearing to make the Banking Department’s order permanent.